The Making of CHIK SHAMPOO

Discuss The Making of CHIK SHAMPOO within the Marketing Management forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; The Making of &#8216;C H I K&#8217;
Late 70&#8217;s: Following the success of Velvette shampoo in the southern markets, a ...

Late 70’s: Following the success of Velvette shampoo in the southern markets, a pioneering attempt to offer shampoos in small pillow packs, the market was flooded with 70-odd small labels of shampoos, each one eager to nibble a share of an enlarging pie. Most look similar with little differentiation.

Velvette as a brand had become synonymous with ‘sachet shampoo’. Consumers would ask the retailer for a Velvette and they would walk away happy with whatever labels the retailer gave them. Many of them never knew the difference and for the rest it just did not matter.

The success of the sachet changed the structure of the shampoo industry. New layers of consumers, most of them from rural pockets could now afford shampoos. The ‘upper class’ tag attached to shampoos was fast fading away. The market was extremely cut-throat and trade had a significant influence on what the consumer bought.

It was against this background that Chik shampoo was launched by CavinKare in March 1983. The brand was launched initially in 10ml packs and later in sachet form.

Though the market was cluttered with low-cost shampoos, there was a clear opportunity for a “good quality shampoo with appealing perfume at a price which will delight the consumer”.

The brand endeavoured to provide to the masses a significantly superior product than those available at similar points. Chik shampoo used French perfume at the time to differentiate itself on the plank of superior fragrance. The target audience was lower middle-class/semi-rural; monthly household income of Rs. 1,500-3,000; females in the age group of 16-plus.

Innovative radio advertising based on popular cinema dialogues supported the brand; this was quite different from the plain jingles being used by other brands that advertised on radio. The advertising strategy was based on the consumer insight of the powerful appeal of cinema among the common masses. The brand roped in popular southern cine stars in the south like Amala, Khushboo, Manorama and Charlie who were popular with rural audiences to endorse the brand.

Radio was used as the sole mass medium of advertising and the annual advertising spends were in the region of about 2 lakh. Though shampoos were getting encouraging trials from the rural consumers, the penetration levels were extremely low. Many people had no clue how to use a shampoo. To encourage trials,

CavinKare’s team travelled extensively in rural pockets, caught hold of schoolboys to demonstrate how to lather and wash, comb hair and show the difference. This exercise had a significant impact in breaking the ice and made people comfortable with the concept. Another method used to encourage trial was through a consumer scheme, where anyone could take any four empty shampoo sachets to a retailer and take home a Chik sachet free. Though more risky, this scheme paid off and more and more people began asking for Chik at their local retail outlet.

By the late ‘80s the brand had become quite popular in the southern markets. The shampoo market was growing at a healthy clip of 15 per cent at that time. 1990 was a major turning point in the life of the brand when it introduced floral fragrance shampoos in two floral fragrances – rose and jasmine. They turned out be an instant hit with the masses and sales jumped from Rs. 10 lakhs a month to Rs. 30 lakhs a month. The brand continued to use popular cinema celebrities and extended the endorsements to television media in 1992.

In 1993, CavinKare had decided to take Chik shampoo national.
Chik is a recruitment brand and the objective was to expand the market and get new customers into the category. The focus was largely rural though value-conscious sections in urban areas also were attracted to the proposition. The distribution in rural areas was driven through innovative trade schemes and consumer offerings. The market began to surge – by the mid ‘90s, the shampoo market was growing at about 25 percent. Then, packs contributed nearly 40 percent of the total shampoo volumes. Rural markets were growing much faster than the urban markets. The key challenge was in reaching the rural markets. Most villages in India are of very small size. Close to 70 percent of villages in India have population of less than 1,000, the accessibility is low and the local markets are not developed.

The good news is that there are about 47,000 haats and 25,000 melas organised in such villages. The average daily business transacted in these haats is close to Rs 2 lakh. The company made use of such opportunities as well as created availability in smaller villages through the wholesale network. The right marketing strategy for the rural market is to balance the conflicting dimensions of ‘availability’ on the one hand and ‘affordability’ on the other.

During the mid ‘90s, the Chik pneumonic and the pack were changed to bring in design and colour elements, which enabled on-shelf differentiation and aided recall. Packaging becomes even more critical when viewed in the context for rural marketing.

Consider some facts and insights, which a study on the factors influencing shampoo buying in rural markets threw.

A significant portion of buying happens by looking at the wrapper. The rural consumer used this insight to improve packaging while branding was made more prominent and the graphic improved to enable quick identification.

By the year 1999, Chik was already the second largest brand of shampoo in India - (also in rural markets) – only next to Hindustan Lever’s Clinic Plus. This year was to see a major development in the brand, which would take it to greater heights. Some years back while on a market visit Mr. C. K. Ranganathan, Chairman & Managing Director, CavinKare Pvt. Ltd. happened to interact with a rural consumer who was using soap to wash his hair and had been doing this for ages. During the course of the discussion the consumer told the Chairman that he had not seen any visible damage to his hair.

Though the hair felt rough, the consumer was fine with that.
So why would he start paying for and using shampoos? During this discussion CavinKare got the insight that the number of adults per household in India is about five. At Rs. 2 per sachet of shampoo and four washes a month it meant Rs. 40 for hair wash alone. There was no way the consumers were willing to spend this kind of money on washing hair every month. CavinKare got the feedback that of the cost of hair wash could be cut to Rs. 2 per person per month he would no be averse to try a shampoo. That meant that the consumers wanted something as marginal as a 50-paise shampoo pack.

Initially, the thought of offering a 50-paise shampoo sounded ridiculous. How do you offer a good quality shampoo at that price? Could something like this be viable?

CavinKare worked backwards from this brief and made the 50-paise shampoo happen. It took them a few years to develop the formula and packaging. The launch happened in September 1999. Chik was the first brand to launch a shampoo sachet at 50-paise. The results were amazing; shampoo’s growth rate in rural India became almost twice that of the urban sector.
The price point was instrumental in driving distribution in deep rural pockets. The market share of Chik after the launch of Chik 50-paise went up from 5.61 percent in 1999 to over 23 percent now.

Today, Chik, a Rs 100 crore brand based on MRP value, is the No. 1 brand of shampoos in rural India. It is strong rural brand and roughly 65 percent of the sales of Chik shampoo come from rural markets. It symbolizes the requirement of a shampoo for Indian consumers. An accompanying table illustrates the rural hold of Chik in some states in India having significant rural population. The value proposition offered has helped us to become number one in many states in rural India.

To sum up, rural markets are an opportunity as a challenge. In most rural markets recruitment is the issue. The rural consumer is very rational as well as value conscious. Therefore, the marketing mix must deliver superior value to the rural consumer at a price point he is comfortable with in order to be successful.

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Late 70’s: Following the success of Velvette shampoo in the southern markets, a pioneering attempt to offer shampoos in small pillow packs, the market was flooded with 70-odd small labels of shampoos, each one eager to nibble a share of an enlarging pie. Most look similar with little differentiation.

Velvette as a brand had become synonymous with ‘sachet shampoo’. Consumers would ask the retailer for a Velvette and they would walk away happy with whatever labels the retailer gave them. Many of them never knew the difference and for the rest it just did not matter.

The success of the sachet changed the structure of the shampoo industry. New layers of consumers, most of them from rural pockets could now afford shampoos. The ‘upper class’ tag attached to shampoos was fast fading away. The market was extremely cut-throat and trade had a significant influence on what the consumer bought.

It was against this background that Chik shampoo was launched by CavinKare in March 1983. The brand was launched initially in 10ml packs and later in sachet form.

Though the market was cluttered with low-cost shampoos, there was a clear opportunity for a “good quality shampoo with appealing perfume at a price which will delight the consumer”.

The brand endeavoured to provide to the masses a significantly superior product than those available at similar points. Chik shampoo used French perfume at the time to differentiate itself on the plank of superior fragrance. The target audience was lower middle-class/semi-rural; monthly household income of Rs. 1,500-3,000; females in the age group of 16-plus.

Innovative radio advertising based on popular cinema dialogues supported the brand; this was quite different from the plain jingles being used by other brands that advertised on radio. The advertising strategy was based on the consumer insight of the powerful appeal of cinema among the common masses. The brand roped in popular southern cine stars in the south like Amala, Khushboo, Manorama and Charlie who were popular with rural audiences to endorse the brand.

Radio was used as the sole mass medium of advertising and the annual advertising spends were in the region of about 2 lakh. Though shampoos were getting encouraging trials from the rural consumers, the penetration levels were extremely low. Many people had no clue how to use a shampoo. To encourage trials,

CavinKare’s team travelled extensively in rural pockets, caught hold of schoolboys to demonstrate how to lather and wash, comb hair and show the difference. This exercise had a significant impact in breaking the ice and made people comfortable with the concept. Another method used to encourage trial was through a consumer scheme, where anyone could take any four empty shampoo sachets to a retailer and take home a Chik sachet free. Though more risky, this scheme paid off and more and more people began asking for Chik at their local retail outlet.

By the late ‘80s the brand had become quite popular in the southern markets. The shampoo market was growing at a healthy clip of 15 per cent at that time. 1990 was a major turning point in the life of the brand when it introduced floral fragrance shampoos in two floral fragrances – rose and jasmine. They turned out be an instant hit with the masses and sales jumped from Rs. 10 lakhs a month to Rs. 30 lakhs a month. The brand continued to use popular cinema celebrities and extended the endorsements to television media in 1992.

In 1993, CavinKare had decided to take Chik shampoo national.
Chik is a recruitment brand and the objective was to expand the market and get new customers into the category. The focus was largely rural though value-conscious sections in urban areas also were attracted to the proposition. The distribution in rural areas was driven through innovative trade schemes and consumer offerings. The market began to surge – by the mid ‘90s, the shampoo market was growing at about 25 percent. Then, packs contributed nearly 40 percent of the total shampoo volumes. Rural markets were growing much faster than the urban markets. The key challenge was in reaching the rural markets. Most villages in India are of very small size. Close to 70 percent of villages in India have population of less than 1,000, the accessibility is low and the local markets are not developed.

The good news is that there are about 47,000 haats and 25,000 melas organised in such villages. The average daily business transacted in these haats is close to Rs 2 lakh. The company made use of such opportunities as well as created availability in smaller villages through the wholesale network. The right marketing strategy for the rural market is to balance the conflicting dimensions of ‘availability’ on the one hand and ‘affordability’ on the other.

During the mid ‘90s, the Chik pneumonic and the pack were changed to bring in design and colour elements, which enabled on-shelf differentiation and aided recall. Packaging becomes even more critical when viewed in the context for rural marketing.

Consider some facts and insights, which a study on the factors influencing shampoo buying in rural markets threw.

A significant portion of buying happens by looking at the wrapper. The rural consumer used this insight to improve packaging while branding was made more prominent and the graphic improved to enable quick identification.

By the year 1999, Chik was already the second largest brand of shampoo in India - (also in rural markets) – only next to Hindustan Lever’s Clinic Plus. This year was to see a major development in the brand, which would take it to greater heights. Some years back while on a market visit Mr. C. K. Ranganathan, Chairman & Managing Director, CavinKare Pvt. Ltd. happened to interact with a rural consumer who was using soap to wash his hair and had been doing this for ages. During the course of the discussion the consumer told the Chairman that he had not seen any visible damage to his hair.

Though the hair felt rough, the consumer was fine with that.
So why would he start paying for and using shampoos? During this discussion CavinKare got the insight that the number of adults per household in India is about five. At Rs. 2 per sachet of shampoo and four washes a month it meant Rs. 40 for hair wash alone. There was no way the consumers were willing to spend this kind of money on washing hair every month. CavinKare got the feedback that of the cost of hair wash could be cut to Rs. 2 per person per month he would no be averse to try a shampoo. That meant that the consumers wanted something as marginal as a 50-paise shampoo pack.

Initially, the thought of offering a 50-paise shampoo sounded ridiculous. How do you offer a good quality shampoo at that price? Could something like this be viable?

CavinKare worked backwards from this brief and made the 50-paise shampoo happen. It took them a few years to develop the formula and packaging. The launch happened in September 1999. Chik was the first brand to launch a shampoo sachet at 50-paise. The results were amazing; shampoo’s growth rate in rural India became almost twice that of the urban sector.
The price point was instrumental in driving distribution in deep rural pockets. The market share of Chik after the launch of Chik 50-paise went up from 5.61 percent in 1999 to over 23 percent now.

Today, Chik, a Rs 100 crore brand based on MRP value, is the No. 1 brand of shampoos in rural India. It is strong rural brand and roughly 65 percent of the sales of Chik shampoo come from rural markets. It symbolizes the requirement of a shampoo for Indian consumers. An accompanying table illustrates the rural hold of Chik in some states in India having significant rural population. The value proposition offered has helped us to become number one in many states in rural India.

To sum up, rural markets are an opportunity as a challenge. In most rural markets recruitment is the issue. The rural consumer is very rational as well as value conscious. Therefore, the marketing mix must deliver superior value to the rural consumer at a price point he is comfortable with in order to be successful.

Well, many many thanks for your help and providing the information on CHIK SHAMPOO. BTW, i am also going to upload a document where you can find some useful information and can also included in your report..